@mugundaman

The law of demand and supply is alive and kicking.

We came off a "lost decade" under moi and so from 2002 onwards so we had the benefit of starting off from a low base.

Growth Rate: 5% is not "red-hot" given some countries like India and China (if you believe the official stats) had 7-10% growth for more than a decade. Some areas will continue to see an increase in prices if access (eg roads) make in-roads.

Middle Class: It will continue growing but 'affordability' of real estate remains key. People benefit from living closer to where they work and the "affordable" plots further out may have a commuting cost.

On an all-cash personal/individual portfolio, one can get 11% (after tax) on IFBs.
In some "middle-class) parts of Nairobi, the gross rental yields are 6% (pre-tax), then discount maintenance costs, etc. Plus the hassle of owning real estate - dealing with tenants, etc.
[Rents usually increase but IFB yields will not]

Will the property increase in value by 5% annually to match the IFBs?

There are many other factors that come in play. This is a not a comprehensive analysis.

If one is buying a plot, without building a rentable structure, then the capital appreciation required is at least 11%.

I agree that GoK playing in the market distorts the market but GoK can not supply enough even with the 3% tax. What GoK is doing si helping to reduce the inequality because there is a group of people who are certainly being ignored by th protery developer.
My point is is that without GoK intervention there is a huge group of people who are being left out from the market because developers are looking for a 30-40% return on investment!
Also by intervening GoK creates a "new" middle class bu enabling a group of people to obtain an appreciating asset cheaply and also provides the "new" middle with an asset to enable borrowing of the new asset. This also has an effect on the general economy.

@mugunda wrote : "Which an average plot bila structure EASILY beats per annum. As I told you bro, 11% is crumbs in the R.E. Industry. Someone who buys one acre and subdivides into 7 parcels of 1/8ths can make a 200%+ return NET quite easily without breaking a sweat in a few MONTHS let alone a year. This is not rocket science or some theory in a book my broda this is FACT."
>>> You are a wholesaler/trader. Good for you.
Those buying 1/8ths from you aren't going to make much in capital gains in the near term.
What you are describing is a pyramid scheme of sorts.

I am not knocking your business model of buy wholesale and sell retail. Very sensible business.

Let us be realistic on time-frame, how long would it take you to get the title into your name, sub divide and sell all the subdivided plots for you to get the return. Anyway good for those making such 'outrageous' profits but I KNOW it is not a walk in the park as it is being portrayed here verses 'other' investments.

Let me sleep easy with bonds courtesy of @maka.

I see you are now shifting goalposts after we proved your arguments held no water. For the record I am NOT a wholesaler. I just gave you an example of how I have earned a 22% return on one plot I bought in January. What more do you want, my broda?
Saying that 1/8ths don't appreciate in Kiinya is like saying the sun will not rise tomorrow. Ask anyone who has bought an 1/8th in Kenya since 1963 if it has appreciated or not year over year.